U.S. Bureau of Labor Statistics

For release 10:00 a.m. (EDT) Tuesday, August 31, 2010 USDL-10-1209
Technical Information: (202) 691-5618  dipsweb@bls.gov  www.bls.gov/lpc
Media Contact: (202) 691-5902  PressOffice@bls.gov
PRODUCTIVITY AND COSTS BY INDUSTRY: WHOLESALE TRADE, RETAIL TRADE, AND
FOOD SERVICES AND DRINKING PLACES INDUSTRIES, 2009
Labor productivity - defined as output per hour - fell in wholesale trade, but rose in retail trade and in
food services and drinking places, in 2009, the Bureau of Labor Statistics reported today. Productivity
changes were as follows:
-3.3 percent in wholesale trade,
1.5 percent in retail trade, and
1.0 percent in food services and drinking places.
In comparison, labor productivity fell in each of the three sectors overall in 2008. However, both output
and hours declined more rapidly in each of the sectors in 2009 than they did in 2008.
Unit labor costs, which reflect the total labor costs required to produce a unit of output, declined in
retail trade but rose in wholesale trade and food services and drinking places. By comparison, unit labor
costs increased in each of the sectors in 2008.
Productivity rose in 2009 in nearly 60 percent of the 50 detailed industries studied. (See table 1.) This
was higher than the 36 percent of detailed industries that recorded productivity increases the previous
year. In 2009, productivity growth in most industries resulted from declines in hours that more than
offset changes in output. Output grew in only 10 of the detailed industries in 2009, while hours declined
in 47. In comparison, output grew in 14 industries and hours declined in 30 in 2008. In 2009, only a
single industry - farm product raw materials wholesalers - registered productivity growth as a result of
increases in both output and hours. Unit labor costs declined in 46 percent of the detailed industries in
2009, compared to 32 percent in 2008.
Wholesale trade
Labor productivity fell 3.3 percent as output declined 10.1 percent and hours fell 7.1 percent. Output per
hour rose in eight of the 19 detailed wholesale trade industries in 2009, compared with five in 2008.
Productivity fell sharply in motor vehicles and parts wholesalers and in machinery and supplies
wholesalers. Output grew in two industries, while hours declined in 18. Unit labor costs declined in six
industries in 2009.
Retail trade
Labor productivity grew 1.5 percent while output and hours declined by 4.4 and 5.8 percent,
respectively. Output per hour increased in 18 of the 27 detailed retail trade industries in 2009, compared
with 12 in 2008. Output rose in eight industries while hours declined in 25 industries. Productivity
increased most rapidly in florists, in other motor vehicle dealers, and in electronics and appliance stores,
where hours fell sharply, as well as in specialty food stores where hours declined less rapidly. Unit labor
costs fell in 16 industries.
Food services and drinking places
Labor productivity rose 1.0 percent as output fell 2.5 percent and hours declined by 3.5 percent. Output
per hour increased in three of the four detailed food services and drinking places industries in 2009, an
improvement over 2008, when productivity grew in only one industry. Output and hours fell in all the
industries in 2009 and unit labor costs fell in one industry.
Over the longer term, 1987 - 2009, output per hour increased in wholesale trade, retail trade, and food
services and drinking places at the following average annual rates:
2.6 percent in wholesale trade,
2.9 percent in retail trade, and
0.7 percent in food services and drinking places.
Output, hours, and unit labor costs also rose in all three sectors over the period. (See table 2.) Between
1987 and 2009, productivity increased in 46 of the 50 detailed industries and unit labor costs fell in 17.
Year-to-year movements in industry productivity may be erratic, particularly in smaller industries. The
annual measures based on sample data may differ from measures generated by a census of
establishments in the industry. Annual changes in an industrys output and use of labor may reflect
cyclical changes in the economy as well as long-term trends. As a result, long-term productivity trends
tend to be more reliable indicators of industry performance than year-to-year changes.
Industry labor productivity measures are updated as data become available. Productivity data through
2008 for industries in mining, manufacturing, and services were last published on July 9, 2010 and can
be found on the BLS Labor Productivity and Costs web site at www.bls.gov/lpc.

Technical Note
Labor Productivity: The industry labor productivity measures describe the relationship between
industry output and the labor time involved in its production. They show the changes from period to
period in the amount of goods and services produced per hour. Although the labor productivity measures
relate output to hours of all persons in an industry, they do not measure the specific contribution of labor
or any other factor of production. Rather, they reflect the joint effects of many influences, including
changes in technology; capital investment; utilization of capacity, energy, and materials; the use of
purchased services inputs, including contract employment services; the organization of production;
managerial skill; and the characteristics and effort of the workforce.
Output: Industry output is measured as an annual-weighted index of the changes in the various products
or services (in real terms) provided for sale. Real industry output is derived by deflating nominal sales
using BLS price indexes.
Industry output measures are constructed primarily using data from the economic censuses and annual
surveys of the U.S. Census Bureau, U.S. Department of Commerce, together with information on price
changes primarily from BLS. The measures in this news release incorporate current data from the Census
Bureaus Annual Wholesale Trade Report (March 2010), Monthly Wholesale Trade Survey (May 2010),
Annual Retail Trade Survey (March 2010), and the Annual Revision of the Monthly Retail and Food
Services: Sales and Inventories (April 2010).
Labor Hours: The primary source of industry employment and hours data is the BLS Current
Employment Statistics (CES) survey. The CES provides monthly data on the number of total and
nonsupervisory worker jobs held by wage and salary workers in nonfarm establishments, as well as data
on the average weekly hours of nonsupervisory workers in those establishments. Data from the Current
Population Survey (CPS) are also used to supplement the CES data. CPS data are used to estimate
employment and hours of self-employed and unpaid family workers in each industry. Data from the
CPS, together with the CES data, are also used to estimate the historical average weekly hours of
supervisory workers for each industry. Hours of all persons in an industry are treated as homogeneous
and are directly aggregated.
Unit Labor Costs: Unit labor costs represent the cost of labor required to produce one unit of output.
The unit labor cost indexes are computed by dividing an index of industry labor compensation by an
index of real industry output. Unit labor costs also describe the relationship between compensation per
hour and real output per hour (labor productivity). Increases in hourly compensation increase unit labor
costs; increases in labor productivity offset compensation increases and lower unit labor costs.
Compensation, defined as payroll plus supplemental payments, is a measure of the cost to the employer
of securing the services of labor. Payroll includes salaries, wages, commissions, dismissal pay, bonuses,
vacation and sick leave pay, and compensation in kind. Supplemental payments include legally required
expenditures and payments for voluntary programs. The legally required portion consists primarily of
Federal old age and survivors insurance, unemployment compensation, and workers compensation.
Payments for voluntary programs include all programs not specifically required by legislation, such as the
employer portion of private health insurance and pension plans.
Revisions: This news release incorporates preliminary data from the Census Bureaus 2007 Economic
Census; the labor productivity and output series for some industries have been revised for 2008 and prior
years as a result. This news release also incorporates the annual benchmark revision of the BLS Current
Employment Statistics (CES) survey published in February 2010. The industries included in this release
are classified according to the 2007 NAICS. Since the last release of data for wholesale trade, retail
trade, and food services and drinking places on August 28, 2009, the base year has been changed from
1997 to 2002 for all indexes. All of the measures for 2009 in this release are preliminary and subject to
revision.
Additional Information: While the rates of change reported by BLS in this news release are rounded to
one decimal place, all industry productivity percent changes are calculated using index numbers rounded
to three decimal places.
Industry productivity and related indexes and rates of change can be accessed online by visiting the
Labor Productivity and Costs web site at http://www.bls.gov/lpc/. Levels of industry employment,
hours, labor compensation, value of production, and the implicit price deflator for output for these
industries are available upon request by calling the Division of Industry Productivity Studies (202-691-
5618) or by sending a request by e-mail to dipsweb@bls.gov. Information in this report will be made
available to sensory-impaired individuals upon request. Voice phone: 202-691-5618; TDD message
referral phone number: 1-800-877-8339.
To subscribe to the industry productivity programs electronic notification services, send an e-mail to
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